Rise of internet radio: What do traditional FM players think?

05 Apr,2012

By Robin Thomas

 

The internet today has become the fastest growing medium in the country, and mobile has more or less become a necessity. So influential is the internet and mobile today that every medium is harping onto the digital bandwagon. The rise of internet and mobile has compelled even FM radio to spread their wings online. Radio Maska which plays 24×7 Hindi music claims to be India’s first Bollywood internet radio station, catering to Indian and NRI listeners.

 

Besides, Timbre Media, a multi platform and multi genre radio company will soon be launching an internet radio station; VentureNet Partners, a Bengaluru based internet radio company will also launch Radiowalla, a premium model internet audio service that promises a variety of special interest internet radio channels. Realizing the potential of internet, even traditional FM radio stations have extended their reach online. Radio Mirchi for instance launched two internet radio stations- Meethi Mirchi, (plays contemporary melodies) and Purani Jeans (plays Hindi retro). Nearly 3.5 years ago, Radio City launched its music portal, PlanetRadiocity.com and only recently the music portal announced the launch of its new web radio genre, IndiPop Radio.

 

Rachna Kanwar

Rachna Kanwar – VP and Business Head, Digital Media and New Business, Radio City was of the view that the rise in internet radio stations is a reflection of people’s media consumption and the rising internet penetration in India and around the world. “More and more people are consuming music on the internet and therefore it is but natural that the potential has been tapped by players. While music has always been available illegally, today the whole process is getting legalized. Even music companies are realizing the potential of the digital platform and its demand and looking at the platform differently. This is the future of consumption and serious players realize they cannot ignore the phenomenon.”

 

Prashant Panday

For those complaining about lack of differentiation in FM radio, internet radio may have come as a huge relief as it promises variety in both music and non-music content. However, once FM phase III is rolled out, FM stations hope to witness more innovations along with differentiation in content. So, is there a scope for the two to co-exist or do traditional radio stations need to press the panic button? According to Prashant Panday, CEO Radio Mirchi, “No one needs to be worried about anything if they can adjust to the new realities. If an FM broadcaster prefers to remain only an FM broadcaster, it will be in trouble. But if it can seamlessly migrate to the internet platform, it will be able to maximize the combination of the two formats. So no….there is no need to worry.”

 

Rabe T Iyer

Rabe T Iyer, Business Head, BIG FM was of the opinion that online radio stations traditional FM stations need not worry about online radio and although there are limitations, online radio is an extension of traditional radio stations.

 

Internationally, online radio stations augment terrestrial radio listening rather than substitute it. It’s augmented by users logging in from work and homes via the net and accessing their favourite stations. Yes, Online music with its niche music genre will fill the gap which traditional radio is unable to experiment with due to commercial consideration however traditional FM stations will not worry about growth of online radio.”

 

In an earlier interaction with MxMIndia, M Sebastian, Co- founder and CEO, Timbre Media had said, “There is sufficient space for everyone to co-exist and grow. Rather than worrying, we need to identify areas of partnerships that lead to mutual benefit and faster growth and work towards realizing the full potential of the audio medium.”

 

The listeners of internet radio stations are said to be those that are dissatisfied with the traditional FM radio stations however the market for internet radio is still small and currently caters to only specific or niche audience. Ashish Pherwani, Associate Director, Advisory Services, Ernst & Young believes that terrestrial FM radio stations will not have to worry about their internet radio counterparts at least for the next five years. He is also of the view that as a business there are many similarities as both internet radio and traditional FM radio stations are in the business of disseminating music.

 

Speaking about the advantages and disadvantages of the internet radio and traditional radio stations, Mr Pherwani said, “As far as listening to radio is concerned, FM radio stations is absolutely free and this is where traditional radio has an upper hand over the internet radio. The disadvantage however is the fact that FM radio licenses are very expensive as a result many companies undergoing loses.”

 

Unlike the traditional radio stations which do not charge listeners for listening to radio and is mainly advertising led, the business model of most internet radio stations are either subscription or advertising led or both depending on their radio channels. Like their traditional radio counterparts, internet radio stations too have to pay music royalty costs i.e. a minimum royalty and revenue sharing model. When asked to share his views on internet radio and the benefits it may have on the music companies, Rakesh Nigam, CEO, IPRS (The Indian Performing Right Society Limited) said, “Digital music in India is only picking up, with 3G and 4G services entering the market, internet radio stations will only grow. As a result the sale of music CD’s will only further decline as they will be heard online rather than be purchased. Thus there is potential for internet radio and as a result it will be a win-win situation for all including the music companies.”

 

Although internet radio has been around for a while, it is still at a nascent stage in India and perhaps for many it is still a new format of radio station hence it needs to first spread awareness about its existence and features. Traditional FM players on the other hand have established themselves in the market and realizing the potential of the internet some of them have already taken their station online. Most of these FM players therefore find no reason to worry about the rising number of internet radio stations. They are of the opinion that differentiation and innovation in FM radio will further increase with phase III rollout and besides it will further increase the reach of traditional FM radio which the internet radio stations may find hard to match, at least initially.

 

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